The “Green Economy” initiative in Switzerland: Lessons from a sad but predictable defeat

This weekend the Swiss people exercised their democratic sovereignty to say “Yes” or “No” to a very important popular initiative, labeled “Green Economy.” Its full name was “For a sustainable economy based on an efficient use of resources.” This initiative was initially spearheaded by the Green party. In essence, it proposed a gradual reduction in the country’s ecological footprint to one planet, down from about 3.5, over the next 35 years. The final verdict was “No,” with a rejection of the initiative by 63.5% against versus 36.5% in favor. (If you need to brush up on what popular initiatives mean in Swiss direct democracy, click here.) Only the canton of Geneva said “Yes,” by a relatively short majority of 52%. Among all other cantons, the highest “No” rate of 78% was observed in the central canton of Schwyz; the lowest “No” vote was around 53% and came about in Basel-City and in Vaud.

This sad but predictable defeat for an extremely timely and important change of policy and mentality was driven by fear — mainly through the opposition voiced by many business circles, employer unions, conservative political parties, but also associations representing automobile users, home owners, and consumers. Over the past weeks, the “Yes” campaign’s posters showing babies whose future deserves our self-restraint, or the by now well-known photograph taken from space of the only planet we have,

Bildergebnis für affiches NON initiative economie verte suisse

had to increasingly compete in citizens’ brains with the “No” campaign’s abrasive rhetoric involving, among other things, the picture of a green-colored straight-jacket with slogans such as “Massive restrictions for everyone” or “Less mobility at a higher cost.” Over the weeks, the support for the initiative dwindled as the campaign got more and more unbalanced.

Bildergebnis für affiches NON initiative economie verte suisse

Heinz Karrer, the head of economiesuisse, the country’s organization of large businesses (from the employer side), recently published an op ed article in the Lausanne-based daily newspaper Le Temps. In the article, he argued strongly against the initiative. I would like to quote him at length because his position offers a blatant case for one of this blog’s main claims — namely, that within a growth economy, the rhetoric and practice of the “circular economy” are entirely compatible with an increase in the total ecological footprint.

Let us be clear: the business circles are not opposed to the green economy. Quite to the contrary, they have for several years supported the joint efforts made by the economic, scientific, and societal circles in this area. (…) One can only observe that a great number of Swiss businesses are already implementing the principles advocated by the Greens: circular economy, respect for the environment, responsible consumption of resources. In fact, it is in their interest to reduce resource consumption, to recycle and to avoid wastefulness, in order to reduce production costs. It is not by chance that Switzerland is one of the countries that makes the most efficient use of resources and energy (…)

[Le Temps, September 16, 2016]

The readers of this blog will immediately recognize, in this passage, the typical confusion between a circular growth economy and a perma-circular economy: Efficiency and recycling have been encouraged at the business level in order to boost (or at least not impede) profits and growth, but at the economy level environmental impacts have not notably improved. This can be seen by supplementing Karrer’s optimistic discourse with the actual aggregate data on the country’s ecological footprint:

Bildergebnis für switzerland ecological footprint

During all the years where, according to Karrer, Swiss businesses have officially been improving their efficiency, the economy’s ecological footprint has remained stable at a level of 6 global hectares per person, while increasing in relative terms from 2.6 planets around 1985 to pretty much 3.5 planets now. (In the meantime, as a recent UNEP report has shown, world material flows have grown more quickly — not less quickly! — than world GDP.) We can only conclude that more and more of what the Swiss economy consumes has been externalized for production in other parts of the planet, or that Swiss businesses have simply exploited rebound effects in order to keep impacting the biosphere as much as before, but with lower per-unit costs and possibly higher profits through higher or stable sales.

This is, indeed, what Karrer had explicitly in mind when he sketched some of the impacts of the initiative as he saw them. In order to implement a one-planet ecological footprint, he claimed,

it will not suffice to sort the compost or to turn off the lights in the bathroom. We will have to cut to the bone by accepting to produce and earn much less. The initiative therefore allows the State to take fiscal measures, to regulate production processes and the commercialization of products. It will have to impose incisive measures, without worrying about their profitability for businesses.

The increase in costs that will result from this will put in jeopardy numerous branches [of the economy] and will generate large and lasting losses in employment. Industry will be particularly impacted, especially those sectors which need a lot of raw materials and energy, such as the chemical or machinery industries, which account for several tens of thousands of jobs in Switzerland.

[Le Temps, September 16, 2016]

In essence, the Swiss business elite is asking for a State-sanctioned right for the national economy to keep impacting the planetary biosphere 3.5 times more than what is permitted by its known regenerative capacities. And it is asking for this on the grounds that — even though the initiative would have required a transition period of about 35 years — the Swiss entrepreneurs, who usually pride themselves on their ability to innovate and their adaptability, cannot possibly adapt to the needs of the planet.

This is rather surprising. When profitability or competitiveness — or technological “progress” toward massive mechanization —  call for job destruction, the business circles (not just in Switzerland, but everywhere) routinely admonish the workforce to be flexible and to accept retraining, and ask the State to ensure that training and schooling keep the national workforce in line with the needs of industry, banking, and so on. But when the stakes are environmental, this same flexibility and adaptability suddenly seem absent in the entrepreneurial camp. The ability to create jobs and activities within the planetary boundaries, not just for a few years but forever onward — an ability which is perhaps the greatest business challenge of the century, and a huge part of the social responsibility one would expect of corporations as well as of small businesses — seems out of reach and is criticized as an unacceptable imposition.

When industries are forced to shrink or to get phased out, sometimes in a planned way, entrepreneurs as well as governments often argue that the iron necessity of economic adaptation and evolution requires such changes. Why not adopt the same ambitious and positive attitude when it comes to phasing out industries that are unable to produce without destroying the very life support of humanity? Why are incentives (and governmental assistance) for business to adapt to ecological necessities less acceptable than incentives (and governmental assistance) for working people to adapt to — often much less legitimate and much more scientifically dubious — “economic” necessities?

One has to admit that the initiative’s promoters were perhaps insufficiently precise in what they meant by the circular economy which their very campaign posters called for:

Bildergebnis für affiches NON initiative economie verte suisse

Admittedly, Karrer had a point when he claimed that the Swiss economy is already well on its way towards becoming a circular growth economy. What the “Yes” campaign should have emphasized much more is that it is not at all on track to be a perma-circular economy any time soon. By sticking to rather general calls for circularity and recycling, within the more politically correct context of a growth economy which they (perhaps rightly) thought they could not challenge in addition, they failed in really showing what was at stake. It was easy for Karrer to end his pro-“No” diatribe thus:

Under the false guise of an attitude of responsibility, this initiative in reality seeks to impose on Switzerland a fully fledged de-growth program.

[Le Temps, September 16, 2016]

Not entirely wrong, if the scientific and technical facts put forward in my earlier post on François Grosse’s contribution are right: Persistently high or even moderate growth makes the circular economy ineffective, at least as far as ecological necessities go. Not entirely correct, either, in its dark and ominous undertones, since what’s at stake is a more egalitarian society with a good living standard for all. The “Yes” camp were not disputing the need for much more fairness within Switzerland or worldwide, and neither were they unaware of the challenge that the proposed contraction of the ecological footprint represented — and of the consequent need for public framework measures in order to accompany industries, their workers, and their engineers in the difficult task of redeployment.

The challenges are indeed immense — but I thought I had always heard entrepreneurs and business people, in their motivational talks and self-help books, claim that no challenge is too difficult if you want to succeed. Talk about space conquest and asteroid mining to promote continued material growth, and you might have on board those same entrepreneurs, corporations, and political parties that called for saying “No” to this initiative. This seems to me to be the core of the prevailing hypocrisy. Adaptation and redeployment are deemed fine and even desirable, but only when they go in the direction in which capitalism has always driven society: more extraction, at lower cost, allowing for more accumulation of corporate profits. Employment is a collateral benefit — it will be used (as it was in this “No” campaign) when it suits the underlying purpose, but it will be called secondary (or sadly incompatible with common-sense economics) when profit and growth require the build-down or the relocation of wage jobs.

I am certainly not claiming that the transition to a perma-circular economy would be easy or simple. Nor am I suggesting that the initiative’s promoters had all the answers to the “How?” of their proposal of a 35-year energy and material-flow descent trajectory.

The only partly valid point Karrer puts forward concerns international coordination. At a recent systems-science conference in Amsterdam, where I presented a talk on perma-circularity, I heard the Swiss-born economist Carlo Jaeger explain that international coordination will be the chief challenge in the coming age of higher risks and need for planet-wide collective action. It is true that in the current international context, whatever footprint Switzerland would renounce would probably be transferred to other parts of the planet, and then possibly, at least in part, imported back into the country:

Switzerland will be the only country in the world to inflict such treatment to its population. The lost production will simply be snatched up by others, with a zero effect on global resource consumption or on the environment.

As to consumers, they will be even more tempted to buy outside of our borders, in order to escape astronomical [domestic] prices. There too, the environment will not benefit in the least.

[Le Temps, September 16, 2016]

This point is only partly correct (and the choice of emphatic words shockingly inadequate). How much Swiss consumers would be allowed to purchase abroad would depend on how the national one-planet norm treats the footprint embodied in imported goods. Higher prices would need to reflect higher ecological footprint — and if they did, one-planet-motivated import duties (which probably even the WTO’s exception clauses would allow) would make ecologically deleterious goods from abroad just as expensive as perma-cirularly produced domestic goods.

Switzerland would probably need to become a much more self-sufficient economy (something deeply rooted in part of the Swiss mentality, if the “Wahlen plan” which strategized for the country’s self-sufficiency in foodstuffs between 1940 and 1945 is any sign) and rely less on foreign resources to externalize part of its footprint. The same would be true of the vast majority of industrial countries. The supposed sacred right to an ecological footprint that lastingly remains at 3 or 4 or 6 planets — under the specious “trickle-down” argument that says everyone on Earth, and especially the poor, will benefit from wealthy industrial countries’ disproportionate footprint — needs to be questioned. This is fundamentally what the initiative was about, it seems to me.

While Karrer is right that in a context of near-total international lawlessness when it comes to ecological norms, Switzerland would face problems on the international scene, one thing is blatantly conspicuous: the Swiss business elite is not calling for the country to become, with the help of its large corporations, a pioneer in perma-circularity and a force for international change; Karrer is not calling for more international coordination (just using its current absence in a short-term, cynical way) and he is not advocating the creation of a World Environment Organization or of international perma-circularity norms that would make the competitiveness mechanisms he fears less stringent. No. He is merely using the word “de-growth” as a bogeyman to stop progress in the direction of perma-circularity, and he is in essence telling us this: We already have a circular growth economy, it’s happily compatible with a lasting footprint of 3.5 planets, and that’s all we are ever going to be prepared to offer you; the rest is [fill in the blank: de-growth, socialism, statism, communism, green authoritarianism, etc.].

I’ve never felt the urgency of the perma-circularity paradigm more strongly than after this predictable defeat of the Swiss “Green Economy” initiative. One out of three voters said “Yes.” That’s reason enough to keep thinking, doing more research, and writing.


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